Senate Panel Holds Gas Price Hearing- oil industry manipulating prices?

[Fausto]

I thought this story was kind of interesting. We hear a lot about OPEC and their occasional manipulation of prices via output cuts, but now we're getting reports of internal memos from companies like BP about ideas to keep oil/gas supplies artificially low here in the US in order to keep prices up.

This bit was priceless:

Levin said the "outrageous" internal memo considered by senior executives at BP Amoco ? now known only as BP ? outlined a series of actions that could be take to maintain high prices in the Midwest, including shipping gasoline to Canada or getting other refiners not to ship fuel into the region.

Now I'm all for reducing our consumption of oil as a nation. But fiddling around with the supply we do have in order to reap greater profits at the cost of the consumer is just wrong. One more reason for me to ride my bike to work....no profits from me for greedy BP execs.

What do you guys think? (and leave the damn SUV's out of it for once)

Fausto

 

[Harvey]

You're suprised? :Q I'm not. Without some oversight, enough money and power concentrated in a few very overpaid hands usually leads to corruption. Can you say Enron?

 

[Adul]

i think they should be fined heavily.

 

[yakko]

<< Can you say Enron? >>

Enroq. Damn! I guess not.

 

[308nato]

I remember this being a topic with the grownups when I was a kid. In the Midwest we have winter blend fuel and summer blend fuel. The price always spikes as the season changes due to "shortages while switching over". Its even been easier for the oil companies to pull this crap on us as refinery capacity has shrunk due to businesses giving it up. Then you throw in the "we are making fuel oil for the northeast" so no gas is being refined thing. We also seem to have a lot of refinery fires when gas prices are low. price goes up due to lack of refinery capacity.

I don't mind paying for the gas. What I mind is being jacked by the distributors who are the real douchebags in this in my estimation. Not the stationowner, the distributor they buy it from.

 

[Kadarin]

The oil industry colluding to raise prices? Say it isn't so! :Q

Adul: 2 things: (1) Dubya is an oil man, and (2) Even if fined, the oil industry would easily find an excuse to pass on the cost of the fine to the gas pump.

 

[bozo1]

<< i think they should be fined heavily >>


They will just raise prices to pay the fine. I don't know what the solution is but that certainly isn't it.

 

[Fausto]

<< You're suprised? I'm not. Without some oversight, enough money and power concentrated in a few very overpaid hands usually leads to corruption. Can you say Enron? >>


No, I didn't say I was surprised...I just thought that some of the stuff that has bubbled to the surface during the course of these hearings was interesting.

More interesting is the fact that Americans have been pretty ambivalent about this so far. They blow a gasket at higher prices when the middle east seems to be the culprit, but have been largely mum about this issue. I'm guessing it will be different this summer if the gas prices jump as much as everyone is predicting they will.

Fausto

<---- 2,000 posts

 

[vi edit]

<< I remember this being a topic with the grownups when I was a kid. In the Midwest we have winter blend fuel and summer blend fuel. The price always spikes as the season changes due to "shortages while switching over". Its even been easier for the oil companies to pull this crap on us as refinery capacity has shrunk due to businesses giving it up. Then you throw in the "we are making fuel oil for the northeast" so no gas is being refined thing. We also seem to have a lot of refinery fires when gas prices are low. price goes up due to lack of refinery capacity. >>



Yep. And even better is when stretch out the couple week "switching over" phase to a couple months because they are having "technical difficulties" at the refinery.

 

[Fausto]

Midwest always seems to get nailed whenever prices go up. I recall a few years ago visiting my folks in northern MI, gas was almost a dollar more than it was here in Atlanta.

Fausto

 

[vi edit]

Midwest takes it over a barrel. (haha)

When you see the price comparisons across the country the midwest may show up as cheaper than say the east coast or the west coast, but when you take into consideration the standard of living adjustments between the two, it shows a whole different story.

 

[BooneRebel]

<<

<< I remember this being a topic with the grownups when I was a kid. In the Midwest we have winter blend fuel and summer blend fuel. The price always spikes as the season changes due to "shortages while switching over". Its even been easier for the oil companies to pull this crap on us as refinery capacity has shrunk due to businesses giving it up. Then you throw in the "we are making fuel oil for the northeast" so no gas is being refined thing. We also seem to have a lot of refinery fires when gas prices are low. price goes up due to lack of refinery capacity. >>



Yep. And even better is when stretch out the couple week "switching over" phase to a couple months because they are having "technical difficulties" at the refinery. >>

That gets me, too. Uhm, we have to raise prices because we're changing the formula and we are having problems. Even though we do this every year, twice a year, uh, we haven't figured it out yet. Oh, by the way, we're going to have technical difficulties again just before the 4th of July, Memorial Day, and Labor Day, too., so you can expect prices to jump 20 cents or so a gallon then, too.

 

[MadRat]

Its time to license all CEOs and other executive officers. Times like this call for a permanent license revocation, fines to each individual officer involved, and time behind bars. Fines against the company simply have no sting. Theoretically the consumers end up paying for the supposed infraction rather than the perputrators.

 

[charrison]

The other problem is that no new refineries have been built in about the last 20 years due to enviromental policies. This does not aid competition and leaves production in the hands of the few.

 

[MadRat]

What was that spat of building they used as an excuse to raise prices 2 years ago?

 

[etech]

(Sen. Carl) Levin acknowledged the investigation "did not discover any evidence of collusion,"

End of story.

 

[Fausto]

<< The other problem is that no new refineries have been built in about the last 20 years due to enviromental policies. This does not aid competition and leaves production in the hands of the few. >>


There's also the problem of the big oil companies buying smaller refineries and shutting them down. It's all about strangling the supply to keep prices up. Hell, they're probably thanking the environmentalists if what you said is true. Not only would that keep production down, it would give them a convenient scapegoat.

Fausto

 

[HermitGuy]

I understand that the so called senate panel was a panel of democrats, oh I wonder I wonder what their findings could be. I have no love for the oil company's, but asking democrats to hold a fair hearing on anything to do with business is like asking a pack of hungry wolves to hold hearing on the safety issues involved in leaving the door to the chicken coop open.

 

[etech]

Fausto1, you don't know what you are talking about, do you want to quit while you are ahead?


The First Gasoline Gripe Of The Season

>>NEW YORK - It's almost summer: time for U.S. drivers to start complaining about "high gas prices." These complaints--just like complaints about the weather--depend on forgetting what summer was like last year and the year before that.

In 1980, the average price for a gallon of gas (regular unleaded) in the U.S. was $1.25, according to the U.S. Energy Information Administration (USEIA). In 1990 it was $1.16. In 2000 it was $1.51. These are nominal prices. Using 2000 prices, gas would have cost $2.86 in 1980, $1.55 in 1990 and the same $1.51 in 2000.
...
Of course, 2000 saw a price spike--perhaps one of the ones the senators are fixing to investigate. Prices went up more in early 2001, peaking in May just before the subcommittee started its study.
If it had waited until January 2002, the last year for which USEIA data is available, it would have seen gas prices drop to $1.14 (or $1.10 in 2000 prices). This means that, since 1980, prices at the pump have fallen by 61.5% in real terms.

The senators might ask as well about the spring of 1999 or the spring of 2002, when prices were much lower and accuse the refiners of flooding the market. They might also wonder about the larger issue: With Americans becoming more efficient everywhere else, why are they not doing the same when it comes to driving?
<<

 

[Fausto]

<< Fausto1, you don't know what you are talking about, do you want to quit while you are ahead? >>


Actually, it's not a question of whether I know what I'm talking about or not. I just wanted to get an interesting dialogue started about these hearings and about the oil industry in general. I thought it was topical given everything that's going on in the middle east so I just threw it out there for you all to discuss.

I'm not trying to push any kind of agenda here, I was just curious to see what you guys thought and maybe hear some other points of view.

It's called dialogue. AT isn't always about having the best slam in the thread, but I hope you feel better.

Fausto

 

[etech]

Fausto1
I'm not trying to push any kind of agenda here,

But fiddling around with the supply we do have in order to reap greater profits at the cost of the consumer is just wrong.
Unproven

no profits from me for greedy BP execs.
Greedy?, What company CEO is not supposed to make money for his company? They aren't running charities. They are running a for-profit business and have a fiduciary responsibility to their shareholders to make a profit as long as they stay within the law.

Midwest always seems to get nailed
Do you know what the term boutique gasoline means. Do some research on how many different blends of gasoline the states require and what happens when the one refinery that makes a certain blend goes down.

It's all about strangling the supply to keep prices up.
Nope, you are not pushing any agenda here.

You don't know what you are talking about, you claim you have no agenda but you are pushing one. Tell me another one. I need another laugh for tonight. I don't know what your purpose was for starting this thread but it sure wasn't what you claimed in your last post.

 

[Fausto]

<< But fiddling around with the supply we do have in order to reap greater profits at the cost of the consumer is just wrong.
Unproven >>


Agreed. I should have prefaced that statement with "if proven true". I guess the "thank god for that hurricane", "ship the oil to Canada", and "buy and then shut down the smaller refineries" memos skewed my opinion somewhat.

<< no profits from me for greedy BP execs.
Greedy?, What company CEO is not supposed to make money for his company? They aren't running charities. They are running a for-profit business and have a fiduciary responsibility to their shareholders to make a profit as long as they stay within the law. >>


Um. The whole point of all this was: "Are they staying within the law, or are they manipulating the prices?" Yes, they are not running charities, but business is supposed to be about fair competition and a fair relationship between the consumer and the manufacturer. And if you don't think most large corporations are greed machines then you have far more faith in humanity than I. Obviously this whole thing did not uncover "collusion" to paraphrase Sen Levin, but the wording of several of the memos that were floated don't exactly paint a flattering picture of the oil co's in question, do they? They of course immediately stated that all proposals in the memos were never implemented after further consideration, but they do give us some insight as to how the companies work and what they may or may not be willing to do in order to keep the aforementioned shareholders happy. Please tell me you don't honestly belive that these guys are totally on the up and up. I'd be happy to tell you the sad saga of natural gas deregulation here in the Southeast if you need any more evidence that these kinds of companies are only too happy to screw you, the consumer.



<< It's all about strangling the supply to keep prices up.
Nope, you are not pushing any agenda here. >>


My opinion. If you think that large corporations such as the oil companies in question are above such tactics, then you're the one who needs to do his homework. There was a big story recently....something about a corporation called Enron? It had somewhat similar overtones as this little tidbit.



<< I don't know what your purpose was for starting this thread but it sure wasn't what you claimed in your last post. >>


I've already answered your question. I thought it would be an interesting topic of discussion. Topical. Affects all of us (we pretty much all drive cars).

And lastly. How about actually contributing to the damn thread? Obviously you have an opinion on the matter, so let's hear it. Why is it so unthinkable to investigate the practices of the oil companies? What really causes the fluctuations in prices (besides OPEC cutting production when it suits them)? Kindly bestow your vast knowledge upon us. That was, after all, the point.

Fausto